Medicare Going Up 13 Percent
Sep. 17–WASHINGTON — Medicare monthly premiums for doctor visits and outpatient care will jump next year from $78.20 to $88.50, federal officials said Friday.
The 13.2 percent increase is lower than last year’s record-high 17.4 percent spike, but still drains more cash from the Social Security checks of Americans 65 and older, from which Medicare premiums typically are drawn.
The premium hike will offset higher program spending because of more frequent use of services, said Herb Kuhn, director of the Center for Medicare Management at the Centers for Medicare & Medicaid Services. Included in that spending is more frequent use of hospital outpatient services, doctor visits, lab tests, imaging and other minor medical procedures.
“They’re all up. They’re all up substantially, and we’re trying to understand how much value we’re getting for that, and we just don’t have a good handle on that,” Kuhn said.
The higher premiums also will help shore up Medicare’s Supplementary Medical Insurance trust fund, which pays a portion of physician and outpatient care. Legislation from recent years that increases what Medicare pays for physician services has left trust fund assets “below where we would normally like it to be,” said Richard Foster, Medicare’s chief actuary.
If Congress increases the physician payment level this year, Medicare’s 2007 premiums for doctors’ services probably will increase as well, Foster said.
Kuhn said doctors should be adequately compensated for treating Medicare’s 43 million elderly and disabled patients. But he added that “the current system right now is just not sustainable. Simply adding larger payment updates to the current system would not only be expensive but from a standpoint of promoting more efficient and better-quality care, this is not going to get us there.”
Those concerns underscore a growing quagmire for Medicare, which is facing rising healthcare costs, an increased use of services, a growing number of beneficiaries and a dwindling tax base to support it. When that’s coupled with a costly new prescription-drug benefit that begins next year, Kuhn said, Medicare’s price tag is “a cause of some major concern.”
The so-called Part B premium, which helps pay for physician services, hospital outpatient care, durable medical equipment and other services, will be only slightly higher than the $87.70 that Medicare officials had predicted in the Medicare Trustees’ Report earlier this year. More than 90 percent of Medicare beneficiaries are enrolled in Part B.
The Part B deductible will rise to $124 in 2006 from $110 this year.
Medicare premiums are updated annually under a formula set by statute. The law requires that Part B premiums cover 25 percent of the program’s costs. The federal government pays the other 75 percent.
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